YouKu (NYSE: YOKU), China's biggest online video firm, has landed its second major distribution deal with a Hollywood studio, signing an agreement with DreamWorks Animation to deliver titles such as Kung Fu Panda and Kung Fu Panda 2, which have been hugely popular in China.
The deal is another endorsement of YouKu's business modem, which seeks to circumvent piracy by pricing titles more cheaply than pirated copies. Before DreamWorks, Warner Bros. was the first major Hollywood content house to sign on with YouKu, and the deals suggest that more studios could be willing to sign on with the low-price model in order to get something out of a massive market with a huge piracy problem.
Pirated DVDs reportedly cost about $1.50 each in China, and YouKu has set its prices as about $1 or less. The titles from the U.S. studios also will later run for free on the YouKu MovieChannel.
- read this Los Angeles Times story
Chinese online firms had trouble raising money during the 2008 meltdown
YouKu launched a video news channel in late 2008